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US dollar soars, pound comes under pressure

Philip McHugh April 16th 2020 - 2 minute read

  • UK Government to announce lockdown plans
  • Euro pushes higher
  • Record drop in US retail sales unable to dent US dollar

UK lockdown extension in the spotlight
Concerns over the UK’s coronavirus outbreak limited the appeal of the pound yesterday, with GBP investors worried that cases are being significantly under reported.

Euro and US dollar gains also contributed to the pound’s losses.

The main point of interest in the UK today will be the government’s announcement regarding its extension to the coronavirus lockdown.

A prolonged extension could send the pound lower.  
Euro supported by coronavirus developments
The euro was able to make broad gains yesterday as markets remained cautiously upbeat about the improving coronavirus situation in the Eurozone.
Some non-essential shops in Italy, Spain and Austria have reopened, with the countries taking tentative steps to restart their economies.
EUR exchange rates could come under modest pressure this morning however if February’s Eurozone industrial production data shows a sharp decline.
Evidence that the manufacturing sector deteriorated even before the major impact of Covid-19 hit could cast fresh doubt over the economic outlook.
US dollar surges as safe-haven demand returns
US advance retail sales saw their sharpest monthly decline on record in March, dropping -8.7% as consumers remained at home.
This was not enough to knock the US dollar offer its bullish footing, though, as safe-haven demand was bolstered by a major drop in oil prices.
Investors will now be focused on the latest US unemployment data.

Analysts are predicting another massive increase in unemployment claims in the first week of April, likely bringing the total claims since the start of the crisis to over 20 million.
Upcoming Data:
Thursday, 16th April 2020
09:30 GBP Bank of England Credit Conditions Survey
10:00 EUR Eurozone Industrial Production
13:30 USD Philadelphia Fed Manufacturing Index

Written by
Philip McHugh

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